wealth

• Income


  A 'flow' concept because income because income flows in & out of the pockets of people or households
• Wealth


  A 'stock' concept; it measures the economic resources & possessions of a person or household at a fixed point. The ONS defines the following as forms of wealth: Property wealth Physical wealth Financial wealth Private pension wealth
• Problems with measuring wealth

  Defining what should be counted as wealth is not straightforward. Calculating the value of assets is difficult. Obtaining data about wealth is not easy. Distinguishing wealth from income can be difficult. Much of the wealth in the form of shares in businesses in the UK is now owned by institutions
• Evaluation of the distribution of wealth

  A large proportion of the population has little or no wealth. The poorest 50% of the population have only 10% of the wealth of the UK. The poorest 10% have virtually no wealth, with many people being in a state of negative wealth.
• Rowlingson and Mullineux (Birmingham Commission Report) - Evaluation of the distribution of wealth

  Key findings:Wealth inequalities occur in different ways, some people have higher incomes than others, some choose to accumulate wealth rather than spend.Wealth affects physical & mental wellbeing, as well as education & employment opportunities.Low levels of income reduce the ability to avoid debt &/or accumulate savings.
• Critics argue that inequalities of wealth are more related to age than class


  People tend to accumulate wealth as they get older
• Supported by the Birmingham Commission - found a clear link between wealth & age with those in the 55-64 age group having the highest levels of wealth
• The poorest 1/10 of this age group have less than £28,000 of wealth on average compared with the top 1/10 who have more than £1.3 million
• Reflects the fact that those on higher & middle incomes have much more chance to accumulate wealth
• Are wealth inequalities based on meritocracy?

  Argued that the inequalities of wealth represent a meritocracy - people with talent & those who save their money or invest prudently are rewarded by building up more wealth.
• Atkinson - Are wealth inequalities based on meritocracy?

  His research reveals that an increasing proportion of national income now comes from inherited wealth, reversing a long-term decline in the importance of inherited wealth going back at least as far as the 19th century.Inherited wealth increased from 4.7% in 1977 to 8.2% in 2006.